Economic Pulse up in November
Consumer mood brightens
One in six plan to spend more on Christmas presents this year
Business sentiment also up but Brexit uncertainty weighing on investment plans
The Bank of Ireland Economic Pulse came in at 80.6 in November 2019. The index, which combines the results of the Consumer and Business Pulses, was up 3.6 on last month but 9.3 lower than a year ago.
The uneventful passing of the Halloween Brexit deadline and the further extension of Article 50 – Prime Minister Johnson managed to strike a new deal with the EU but failed to get it through the UK Parliament – contributed to a bounce in consumer sentiment this month, and while business sentiment also improved, continuing uncertainty is tempering firms’ investment decisions.
Commenting on Bank of Ireland’s November Economic Pulse research, Dr Loretta O’Sullivan, Group Chief Economist for Bank of Ireland said: “The Economic Pulse rose this month with a
bounce in consumer confidence and a smaller increase in business confidence. Given the time of the year, households are starting to turn their attention towards Christmas, with the majority planning to spend either the same or more on presents compared with last year. While Brexit hasn’t gone away, commentary around a no deal has abated and consumer and business sentiment has responded positively. However firms are still cautious in relation to their investment plans for next year.”
“The Consumer Pulse caught a break this month, with the index rising for the first time since June.”
- Consumer Pulse rises in November
- Brexit worries take a back seat
- Festive cheer kicks in
The Consumer Pulse recovered some ground in November 2019, coming in at 76.0. This was up 6.1 on last month’s reading but 14.2 lower than a year ago. With the further extension of Article 50 taking a no deal Brexit off the table for now, households were less downbeat about the outlook for the economy this month. They also upgraded their assessment of their own finances and with the festive season fast approaching, one in six plans to spend more on Christmas presents this year compared with last year, while 57% intend to spend about the same.
“Business sentiment ticked up in November but ongoing Brexit uncertainty looks set to keep a lid on investment into next year”.
- Business Pulse up in November
- One in five retailers expects their festive turnover to be higher than last year
- Brexit uncertainty weighing on investment plans
The Business Pulse came in at 81.8 in November 2019, up 2.9 on last month but down 8.1 on a year ago. All sectoral Pulses posted firmer readings this month, with the Retail Pulse – buoyed by broadly positive expectations for the Christmas trading period – leading the charge. While the mood music around Brexit has been more positive lately, there is still considerable uncertainty as to when and how the UK will leave the EU. This is having a knock-on effect on investment decisions, with the November survey finding that around half of the firms that expect to be impacted by Brexit are putting their plans for 2020 on hold, much like the ‘wait and see’ approach they adopted this year.
“After a soft run of readings, the Housing Pulse perked up this month”.
- Housing Pulse gains ground in November
- 48% expect house prices to rise in the next 12 months
- Three in five think rents will go up
The Housing Pulse stood at 80.9 in November 2019, up 7.5 from October. The share of households expecting house prices to increase over the coming year rose in all regions this month, helping to arrest the downward slide in the headline index since the summer. Whether this is a temporary reprieve on the back of recent Brexit developments or something more remains to be seen however.
The Bank of Ireland Regional Pulses bring together the views of households and firms around the country. The results for November 2019 (3 month moving average basis) were mixed, with sentiment up on the month in Dublin and Munster but down in the Rest of Leinster and Connacht/Ulster.
- Dublin Pulse = 83.8 +1.8 points on the previous survey;
- Rest of Leinster = 74.8 -1.1;
- Munster = 73.4 +1.7;
- Connacht/Ulster = 79.1 -1.5
About the Bank of Ireland Economic Pulse:
The Bank of Ireland Economic Pulse survey is conducted in conjunction with the European Commission, with the data feeding into the EU Commission’s Joint Harmonised EU Programme of Business and Consumer Surveys, a Europe-wide sentiment study running since the 1960s. The Economic Pulse surveys are conducted by Ipsos MRBI on behalf of Bank of Ireland with 1,000 households and approximately 2,000 businesses on a range of topics including the economy, their financial situation, spending plans, house price expectations and business activity.